On
March 10, 2014, the bankruptcy court[1] denied Starion
Financial's ("Starion") motion to compel
payment of Starion's attorneys' fees and expenses in
accordance with the confirmed Chapter 11 plan of
reorganization and granted the Debtors' motion to
disallow Starion's attorneys' fees and costs. Starion
appealed to this panel, and we reversed the decision of the
bankruptcy court and remanded the case for consideration of
the issues as to timeliness and reasonableness of the
requested fees and costs.[2]

The
Debtors Stephen D. and Karen A. McCormick now appeal from the
bankruptcy court's order granting in part and denying in
part Starion's motion to compel payment of fees under the
confirmed plan of reorganization, and granting in part and
denying in part the Debtors' motion to disallow
attorneys' fees and costs claimed by Starion. We have
jurisdiction of this appeal from entry of the bankruptcy
court's final order pursuant to 28 U.S.C. § 158(b).
For the reasons set forth below, we affirm.

BACKGROUND

Prior
to bankruptcy filing, the Debtors were engaged in a variety
of businesses, including construction, real estate
investment, and development. The Debtors operated their
businesses individually and through a number of limited
liability companies that they owned and controlled, including
Misty Waters, LLC; Steve and Karen McCormick, LLC; and
Construction Financial Services, LLC.

Over
the course of several years the Debtors, their companies, and
Starion entered into a series of loan transactions that
included execution by the Debtors and their companies of a
number of loan documents, including promissory notes secured
by mortgages encumbering various parcels of real estate. The
Debtors also executed personal guarantees of the obligations
owed to Starion by the entities owned by the Debtors.

Defaults
under the loans resulted in a workout agreement dated July
26, 2012, among Starion, the Debtors, and their companies. As
part of that agreement, Starion agreed to forbear from
exercising its default remedies under certain conditions. The
Debtors and their companies reaffirmed their obligations to
Starion under the loan documents and the Debtors and Misty
Waters, LLC executed a new mortgage encumbering a development
called Misty Waters for up to $7 million.[3] The Debtors also
executed and delivered confessions of judgment, apparently to
secure their guaranty obligations. The workout agreement
provided that the confessions of judgment could be
immediately filed with the clerk of the court and transcribed
to such other jurisdictions as Starion desired. The judgments
were entered on July 27, 2012, in Burleigh County, North
Dakota, and Starion promptly transcribed them to other
counties in North Dakota, thereby creating judgment liens in
counties where the Debtors owned real estate.

The
Debtors filed a voluntary Chapter 11 petition on August 29,
2012, and on August 9, 2013, filed a second amended plan of
reorganization. Starion filed its objection to confirmation
raising a number of objections, including: "Starion, as
an oversecured creditor is entitled to its attorney's
[f]ees. The Plan does not provide for payment [of] Starion
Financial's attorney's fees claim."

Starion,
the Debtors, and their companies settled Starion's plan
objection with an addendum to the Debtors' second amended
plan dated September 10, 2013 ("Starion
Addendum").[4] The Starion Addendum identified all of the
obligations owed to Starion by the Debtors and their
companies, and agreed that the total indebtedness owed to
Starion as of July 1, 2013, included principal of $6, 272,
116.56, interest of $314, 242.86, and interest accrual at a
daily rate of $1, 019.23. The parties agreed upon the plan
treatment and repayment terms for that indebtedness. Among
other provisions, the Starion Addendum stated:

Collection Costs. Debtors agree to pay Starion's
allowable attorney's fees and costs associated with both
Debtors' bankruptcy proceedings including but not limited
to reasonable attorneys' fees, consulting, appraisal,
filing fees, late fees, etc. (collectively referred to as
"Fees") through the Plan. The procedure for
allowance of such attorneys' fees and costs will be as
provided in the Plan.

On
September 13, 2013, the Debtors' plan, incorporating the
Starion Addendum, was confirmed by the bankruptcy court.
Section 8.01(c) of the confirmed plan defines "Allowable
Attorneys' Fees and Costs" as "a claim against
the debtors for an oversecured creditor's attorney's
fees and costs incurred in connection with the creditor's
secured claim." That section goes on to describe the
procedure for allowance of the fees and costs as follows:

Any Allowable Fees and Costs must be approved by Debtors
before payment is disbursed. At least ten days prior to the
Effective Date of the Plan, the creditor and/or its counsel,
shall submit an itemized statement (reflecting date, a
description of the services, increments of time spent, and
hourly rate being charged), to the Debtors and their counsel,
for approval. If the parties cannot come to an agreement or
resolution as to the amount of the Allowable Attorneys'
Fees and Costs to be paid, the matter shall be determined by
the Bankruptcy Court, upon notice and hearing. No payment of
Allowable Attorneys' Fees and Costs will be due until
either the agreement of the parties or a final determination
by the Bankruptcy Court that those amounts are due under the
Plan.

On
October 3, 2013, Starion submitted an itemized statement to
the Debtors for various costs including interest, late fees,
real estate taxes, and appraisal and engineering fees. A few
days later on October 7, 2013, Starion submitted an updated
statement that included its attorneys' fees. Taking the
position that Starion was not entitled to these amounts based
upon the plan or 11 U.S.C. § 506(b), the Debtors refused
to pay the amounts requested for appraisal and engineering
costs, and the attorneys' fees and expenses.

Starion
filed a motion requesting the bankruptcy court to compel
payment of its fees in the amount of $125, 014.64 based upon
the plan and 11 U.S.C. § 506(b). On the same day, the
Debtors filed a motion seeking disallowance of the fee
request contending that there is no agreement for the ...

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